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Essar Capital Ltd plans to buy shares worth Rs 1,358 crore in India Securities Ltd (ISL) from the public, which holds 25.02 per cent of equity capital in ISL. It may be noted, Essar Capital holds 74.98 per cent of ISL’s Equity Capital. Essar Capital said it had fixed exit price for the public shareholders at Rs 62 and planning to buy 219 million equity shares.
The buyback comes after ISL’s wholly-owned subsidiary, ETHL Communications Holdings Ltd entering definitive agreement on July 1, 2011, for the sale of entire stake held by it in Vodafone Essar Ltd to Vodafone Group or its nominees for a consideration of $1.26 billion. ISL, which is engaged in providing forex advisory services and business start up consultancy services, was also an investment holding company for Essar Group’s onshore stake, which in turn was held 10.97 per cent in a telecom joint venture (Vodafone Essar Limited) through its wholly-owned subsidiary ETHL Communications Holdings Limited, which sold its entire 10.97 per cent stake in the equity capital of Vodafone Essar Ltd to Piramal Healthcare Limited, in terms of the agreement entered with Vodafone Group for a total consideration of $1.26 billion.
“We are planning to consolidate the Company (including by way of merger or reconstruction) with itself and/or unlisted group investment companies to form a single investment holding company in accordance with applicable laws,” said the company.
In a communication, shareholders of the company said, it believes the delisting of the offer shares is in the interest of the public shareholders of the company and will provide them with an exit opportunity from the Company at the Exit Price, which is fixed at Rs 62 by Essar Capital.”
ISL’s share was trading at Rs 59.60 in Bombay Stock Exchange on Friday morning, up by 0.76 per cent.
Essar Capital is planning to buy 219 million equity shares representing 25.02 per cent of the equity capital of ISL from the public shareholders. Already Essar Capital is holding 656 million equity shares constituting 74.98 per cent of the equity capital of the company which is not listed on any stock exchanges.
ISL, incorporated as a public limited company under the name Dear Leasing and Finance Limited in 1984 in New Delhi, was renamed as India Factors Limited in 1987 and the registered office was transferred to then Madras, now Chennai in 1988. In 1990, the name again changed to India Securities Limited.
ISL reported a PAT of Rs 7.5 crore during the nine months-ended December 31, 2011, as compared to loss of Rs 368.9 crore during the year-ended March 31, 2011. The company’s total net worth was Rs 401.1 crore during the nine months as compared to Rs 393.6 crore during the year-ended March 31, 2011.
On a consolidated basis company’s PAT was Rs 2,372.2 crore during the nine months-ended December 31, 2011 as compared to loss of Rs 714.4 crore during the year ended March 31, 2011. Total income was at Rs 2931.7 crore as compared to Rs 145.7 crore.
Total net worth stood at Rs 3,491.1 crore during the nine months period as compared to Rs 3,099.8 crore during the year ended March 31, 2011
The company has an authorised share capital of Rs 400 crore.